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PacBrands back in black after loss pegged

Glenda Kwek

Shares in Pacific Brands have jumped by more than five per cent after the struggling clothing retailer said it had returned to profitability.

The company made a net profit of $38.9 million in the six months to December 31, up from a $362 million loss in the same period the previous year.

The loss was caused by major restructuring, which the company on Monday said was delivering results despite challenging economic conditions.

Shares in Pacific Brands were up 6.2 per cent to 77.5 cents.

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Sales in the six months to December were down 6.6 per cent on the previous corresponding period, with growth in its underwear brands Bonds, Berlei and Jockey offset by weak sales in workwear brands Hard Yakka and King Gee.

"This result reflects gains achieved through strong operating and financial discipline across the business in continued challenging market conditions," chief executive officer John Pollaers, who was appointed in August, said.

"There is still plenty of work to be done to stabilise sales performance and return the business to sustainable growth. "It is early days, but we are encouraged that the Underwear group turned to growth in the period, with Bonds, Berlei and Jockey all up. It shows that good results can be obtained from strategic focus, discipline and investment in great brands." Pacific Brands said conditions made it difficult to offer financial forecasts for the full financial year.

"Earnings outcomes will be largely dependent upon market conditions, associated sales performance and implementation of the new strategy over time, and may be impacted by ongoing restructuring and rationalisation," the company said in a statement.